Tue, Oct. 18, 12:18 PM
- Oasis Petroleum (OAS -3.1%) is sharply lower after its $785M purchase of Williston Basin assets from SM Energy and subsequent 40M-share offering, but some analysts suggest buying the dip.
- Cowen says OAS addressed inventory concerns with the acquisition, adding 12.4K boe/day of production, 92 core net locations and 31.6M boe of proved developed producing reserves; pricing does not appear cheap, but will prove warranted if acquired locations produce close to the updated productivity numbers of Wild Basin.
- SunTrust says the deal appears positive, with its estimate of ~$3K/acre purchase price in-line with prior core asset sales in the play, but shares are underperforming today given ~25% dilution from the equity deal.
- KeyBanc is less optimistic, saying the deal lacks meaningful accretion and valuation implying ~$5.2K/acre adjusted for production, and ~$4M per core location, “appears a bit rich.”
- Before the deal was announced, Goldman Sachs had downgraded OAS to Sell from Neutral with an $8.50 price target, trimmed from $8.75.
Tue, Oct. 18, 8:10 AM
- SM Energy (NYSE:SM) agrees to acquire 35.7K net acres in West Texas' Midland Basin for ~$1.6B in cash and stock, and sell its Williston Basin assets in North Dakota for $785M to Oasis Petroleum (NYSE:OAS).
- SM says its purchase from QStar, a portfolio company of EnCap Investments and a related entity for $1.1B in cash and 13.4M common shares, will expand its footprint in the Permian Basin to 82,450 net acres.
- SM says preliminary plans for Midland Basin activity include adding a fourth rig during Q4 and increasing to six rigs in early 2017, which will raise expected aggregate 2016 capital spending before acquisitions to ~$710M.
- OAS says its purchase includes 55K net acres and 226 gross operated drilling locations in the Williston Basin, and expects the properties to produce 12.4K boe/day during Q4.
- To help fund the deal, OAS launches a 40M-share public offering, with an underwriters option to purchase up to 6M additional common shares.
- SM +6.3%, OAS -2.1% premarket.
Sep. 30, 2014, 10:34 AM
- The positive market reaction following Encana's deal for Athlon Energy and other recent transactions may put pressure on inventory short majors and other large-cap companies to pursue M&A activity to increase their quality inventory in the U.S. onshore market, according to a UBS report.
- UBS lists six top potential targets, some of which already are swirling in the rumor mill, including Pioneer Natural Resources (NYSE:PXD), with its own fracking fleet and huge Midland Basin play making it a very attractive but expensive target.
- The firm's other five top M&A candidates: COG, CXO, OAS, RRC, WLL.
Jul. 14, 2014, 2:21 PM
- Whiting Petroleum's (WLL +7.4%) $6B buyout of Kodiak Oil & Gas (KOG +5.1%) is renewing investor attention on independent energy firms with operations in the Bakken Shale, especially those significantly owned by hedge funds; Paulson & Co. is the single biggest owner of KOG stock, with just under 10% of shares outstanding as of the last filing date.
- While many of the largest Bakken producers are huge companies or parts of huge companies - Hess (NYSE:HES), EOG, Statoil (NYSE:STO), Marathon Oil (NYSE:MRO), XTO Energy (NYSE:XOM) - a few small and mid-cap independent players show hedge fund interest, CNBC's Brian Sullivan writes.
- The single biggest holder of Oasis Petroleum (OAS +0.5%) also is John Paulson's hedge fund, which owns 9.9M shares (~9.8% of shares outstanding), Jana Partners owns 16M-plus shares in QEP Resources (QEP +1.4%), and WPX Energy (WPX +1.1%) has substantial hedge fund ownership.
Sep. 20, 2013, 10:21 AM
- This month's deal by Oasis Petroleum (OAS +0.5%) in adding 161K acres in the Williston Basin gives the E&P company more real estate in the region relative to its $5.2B enterprise value than any similar-sized competitor, and Sterne Agee says it may lure takeover interest.
- The Bakken region, part of Williston, appeals to larger energy producers due to its proven resource potential and established infrastructure, Raymond James says: OAS has "a nice footprint of acreage. As you get closer to a top-five position in the Bakken... the international guys may want to come in.”
- OAS also offers an attractive valuation, trading at a lower P-E multiple than 71% of U.S. peers, Topeka Capital says.
Aug. 24, 2012, 8:48 AM
QEP Resources (QEP) is paying a rich valuation in its $1.4B purchase of North Dakota properties, which bodes well for other players in the region, an Imperial Capital analyst says. "This acquisition is a positive read-through to the pure play Bakken players, which we believe are takeout candidates," the firm says, listing OAS and TPLM as the most attractive candidates for a buyout deal.| Aug. 24, 2012, 8:48 AM | 2 Comments